By Sam Mamudi

The typical pattern in an economic expansion is for nearly two-thirds of companies to “surprise” on the upside on earnings while just a fifth disappoint. Companies do that by guiding analysts’ estimates low enough that they are easy to hurdle by earnings-season time.

The consensus view for fourth quarter earnings for the Standard & Poor’s 500 companies is 2.7% growth over the prior year, writes Jakab. That’s gloomier than the 10% growth they expected back in October, and the outlook was even higher in April.

Ebullient analyst forecasts routinely succumb to reality and then go too low. The average underestimation for earnings seasons going back to the start of 2010 has been 3.5 percentage points. If that pattern holds, then earnings growth this quarter may actually come in at 6.2%.

That’s good news, of course, and something to look forward to, but it’s also instructive — be careful of taking any earnings estimates too seriously.

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Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.